|
•
Would it be possible to apply for the judicial
sale of a vessel?
•
Would it be possible to arrest a vessel
in a different emirate if the main action is
filed in another emirate?
•
Would it be possible to obtain an order
for arrest of a vessel on preliminary documents and
without a Power of Attorney
especially on urgent matters?
•
Would the UAE Courts accept an undertaking
from a P & I Club to release a vessel?
•
Would it be possible for the owner to
claim damages for wrongful arrest or the legal
costs of an unjustified claim?
•
Would it be possible to discharge the
cargo after the arrest of a vessel or would the arrest include
the attachment of the cargo
on board?
•
Would it be possible for the owner of
a vessel to attach the cargo or refuse delivery of the same?
Would
it be possible to apply for the judicial sale of a vessel?
It
would not be possible to obtain an order for judicial sale
of a vessel unless a final judgment is delivered against the
owner in connection with the main action filed. An application
for the judicial sale of a vessel is only possible once the
judgment becomes final, and "execution" proceedings
are filed by the plaintiff.
The
judicial sale of a vessel will have to be through the execution
court. Execution court fees are payable. A court expert (usually
a surveyor) will be appointed (at the plaintiff's cost although
recoverable from the sale proceeds) to submit a "base
value" for the commencement of the judicial sale. At
such time the vessel has to be auctioned and bids from prospective
buyers may be received.
Top
of Page
Would
it be possible to arrest a vessel in a different emirate if
the main action is filed in another emirate?
It
is possible in accordance with UAE law to arrest a vessel
located in the port of one emirate if another emirate has
jurisdiction for the main action (substantive proceedings).
For example, it is possible to file a main action in Dubai
if the Dubai Court has jurisdiction on the main action, and
obtain an order to arrest the vessel if the vessel is located
in another port in the emirates, such as Sharjah or Abu Dhabi.
However, in such a case the arrest proceedings may take a
few days to be enforced taking into consideration that a formal
letter will have to be exchanged between the courts of the
two emirates before enforcing the arrest order. It is important
for the lawyers involved to co-ordinate the correspondence
between the courts of the different Emirates.
Top
of Page
Would
it be possible to obtain an order for arrest of a vessel on
preliminary documents and without a Power of Attorney especially
on urgent matters?
It will not be possible to obtain an order for the arrest
of a vessel in the UAE unless a Power of Attorney is executed
before a notary, and if the Power of Attorney is obtained
from abroad, it must be signed before a foreign notary (or
other local equivalent), legalised by the country's Ministry
of Foreign Affairs and consularised by the UAE Embassy. If
there is no UAE Embassy in that country, the notarised and
legalised document will need to be consularised by another
GCC country's embassy, then sent to the GCC country's embassy
in the UAE for further authentication. The last step is further
authentication by the Ministry of Foreign Affairs in the UAE.
Similarly, all documents in support of an arrest application
must be translated into Arabic, failing which, no order for
arrest may be granted in the UAE Courts.
Therefore,
on occasions where an arrest needs to be obtained urgently,
it may not be possible to obtain an order for arrest before
the vessel leaves the UAE Port because the translated documents
or more usually, the Power of Attorney, cannot be arranged
on an urgent basis.
Similarly,
the UAE Federal system does not allow an arrest to be obtained
in the afternoon. An application for arrest must be submitted
to the court during the working hours of the court i.e. between
8.00 am and 1.00 pm. There is also no way of obtaining an
arrest on Fridays or public holidays in the UAE. This is with
the exception of the Dubai Court, where an application for
arrest or release can be obtained and enforced in the afternoon
between 5.00 pm to 8.00 pm, Saturday to Wednesday.
Top
of Page
Would
the UAE Courts accept an undertaking from a P & I Club
to release a vessel?
The
UAE Courts will not accept an undertaking from a P & I
Club or from a P & I Club correspondent unless the plaintiff
in the proceedings agrees (in which case the matter of security
can be agreed out of court). Article 118 (3) of the Code sets
out the procedure for automatic release of a vessel upon submission
of security, and the UAE Courts will only usually release
a vessel if a bank guarantee is provided to the court in an
acceptable wording to secure the release of the vessel and
guarantee the claimant's claim.
On
rare occasions, the court may accept a personal or corporate
guarantee if it is evident that the guarantor is substantially
wealthy or has good business standing in the UAE. Such situations
however are extremely rare and open to criticism. In such
cases the court may also ask for the consent of the claimant.
Top
of Page
Would
it be possible for the owner to claim damages for wrongful
arrest or the legal costs of an unjustified claim?
It
is not possible to claim legal costs for an action pursuant
to a successful outcome even if the successful party has spent
extensive money on lawyers fees. Court fees and arrest fees
however are recoverable by a successful plaintiff. If an action
is dismissed, a defendant may be awarded nominal costs by
the court (Dhs 200 - 500), but may not claim damages.
Even
in the case of wrongful arrest of a vessel, the owner of the
vessel may not claim damages for wrongful arrest unless he
is able to prove to the court one or more of the following:-
1.
There is proof that the plaintiff intentionally intended to
cause damage to the owner of the
vessel
by arresting the vessel; or
2.
The plaintiff violated UAE public order, UAE law or the Islamic
Principles of Shariah by
obtaining an order of arrest against
the vessel; or
3.
The application and the arrest were "malicious"
or obtained in "bad faith", and intended
solely
to cause damage to the owner
of the vessel; or
4.
The claim brought in court is insignificant in comparison
with the damage caused
to the owner of the vessel.
The
above principles are based on Article 283 (2) of the UAE Civil
Code 1987 which states "if the harm is direct, it must
unconditionally be made good, and if it is consequential there
must be a wrongful or deliberate element and the act must
have led to the damage".
In
general, the UAE courts usually take the view that seeking
protection through the court system by filing an application
to the court for arrest or bringing an action is a general
right of the public in the UAE. Therefore, any one seeking
protection through the court will not be liable for damages
if his action was dismissed or the arrest was lifted in the
normal course of action. Therefore, unless a plaintiff requesting
damages proves one of the conditions above (usually a "malicious"
or "wrongful" element), the applicant will not be
liable for damages for seeking the protection and assistance
of the UAE judicial system.
It
is therefore difficult to obtain an order for damages for
wrongful arrest of a vessel. This includes the costs of port
charges and crew wages which the owner or charterer will have
to pay even if the arrest was lifted and the action was dismissed
(Dubai Court of Cassation Judgment Nos. 215/93, 197/94, 283/94,
300/94 and 67/97).
If
the vessel owner has no place of business or representative
in the UAE, would it be possible for the Master or the agent
of a vessel to sign a Power of Attorney in favour of a local
advocate or firm of advocates?
It
is possible under UAE law for a local agent to sign a Power
of Attorney on behalf of the vessel's owners to appoint local
advocates provided that he provides a letter of confirmation
from the local port authority that such agent is actually
the agent of the vessel. The notary will insist upon the same
as evidence that such agent is indeed agent for the vessel.
The Master of the vessel, in the absence of an agent (or instead
of an agent), may also sign a Power of Attorney in favour
of a local advocate to represent the interests of the vessel
or its owners in connection with any arrest and main action
proceedings.
Top
of Page
Would
it be possible to discharge the cargo after the arrest of
a vessel or would the arrest include the attachment of the
cargo on board?
Unless
the arrest order specifically provides otherwise, the arrest
order will usually operate to detain the vessel from leaving
the port but does not prevent the owner of the vessel from
discharging a cargo or receiving payment of freight. Such
discharge however will require the consent of the local Port
Authority, and may be subject to their interpretation of the
arrest order.
Top
of Page
Would
it be possible for the owner of a vessel to attach the cargo
or refuse delivery of the same?
Article
222
"It shall not be permissible for
the disponent owner to distrain goods on board the vessel
by reason of non-payment of freight upon arrival but it shall
be permissible to apply to the relevant civil court to deposit
the same with a third party until such time as the freight
on the vessel is paid and to apply to the court for the sale
of the same or part thereof unless security for payment is
put up".
Article
223
1. "The disponent owner shall have a lien
over goods loaded on board the vessel and such lien shall
include the freight of the vessel and appurtenances. The lien
shall remain in force for a period of fifteen days after delivery
of the goods unless a third party acting in good faith has
acquired a right in rem against the same.
2. "The lien shall remain in force even though the goods
may have become mixed with
others of the same type".
Owners
or charterers may refuse the delivery of the cargo pending
payment of the freight payable in connection with the cargo.
This is, however, provided that the cargo was not discharged
from the vessel and is owned by the party liable for freight.
If the cargo was discharged, the owners or the charterers
may not be able to exercise their lien over the cargo without
a UAE court order enforcing the same.
The
owners, may apply for a court order for an attachment against
the cargo after discharge from the vessel provided that the
title of the goods has not passed to an innocent third party.
If, however, the title to the cargo passes to an innocent
third party, it will not be possible for the owner to obtain
attachment against the cargo even if the freight was not paid.
If
the court orders attachment of the cargo on board the vessel
(or part of the cargo on board a vessel), the court is likely
to order the arrest of the vessel itself as the only physical
means of ensuring the attached cargo remains in place.
Top
of Page
|
